Shopping behaviour


Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Shopping behaviour

  1. 1. Retail Marketing    The Retail Marketing dimension is the face of Retail Management that is visible to the consumers. All the efforts of the retailer to manage his retail business is to finally attract customers / consumers to his store and make them buy more and stay with him. Broadly, Retailing can be classified into product retailing & services retailing
  2. 2. Retail Marketing   The add-on services that the retailer provides represents marketing of services other than the actual service or product that is retailed. 7Ps: The additional 3Ps are: People, Physical Evidence and Process(es).
  3. 3. Shopping Behaviour    Marketing Management for products & services starts with the understanding of Consumer Behaviour. Retail marketing Needs to start with an understanding of Shopping Behaviour. Shopping behaviour needs to be distinguished from consumer behaviour. The study of consumer behaviour is generally product or service centric. (Consumer behaviour for soaps / banking services)
  4. 4. Shopping Behaviour   However, one aspect of buying behaviour which is not stressed upon is the place where one buys it. This represents the retail business. A product or brand or service could be available through multiple channels / outlets but a consumer or a group of consumers buy them in deference to their preference for a particular channel / outlet.
  5. 5. Shopping Behaviour   The study of shopping behaviour helps us to answer questions like how many shops does a customer go to before a decision to buy a product is made; why does he / she choose a retailer compared to others, etc. The other aspect that would be of relevance to retailers is the reason for shoppers to shop. Shoppers could have different reasons to shop ranging from SOCIALISING to THERAPY to INFORMATION SEEKING.
  7. 7. Shopping Behaviour Crucial challenges / issues faced by Grocery / Convenience Stores     Related categories and promotional effectiveness Variety seeking Monitoring consumption rates for packaged goods Long term effects of promotions on shopping / shoppers' behaviour
  8. 8. Shopping Behaviour Related Categories & Promotional Effectiveness   Most grocery stores display related categories together The underlying assumption is that a household choice in one category is dependent of its choice in the other. In other words, when to purchase in one product category might depend on the decision for a related category.
  9. 9. Shopping Behaviour    Such an understanding is useful for the retailer because it helps by giving an idea about what kind of promotion will click with the customers. A critical issue, while studying household purchases of multiple categories is being able to identify related product categories. Consumers typically consume certain products together and therefore purchase them together.
  10. 10. Shopping Behaviour  This gives the retailer some extra space to promote unrelated categories “together” or otherwise.
  11. 11. Shopping Behaviour Variety Seeking    Variety seeking behaviour of consumers can be studied under True Variety Seeking and Derived Varied Behaviour. The distinction between true variety seeking behaviour depends on whether observed switching is motivated intrinsically or extrinsically. True variety seeking of consumers takes place only when variation is rewarding in itself.
  12. 12. Shopping Behaviour    Retailers need to differentiate between variety seeking behaviour, repeat purchasing and derived switching behaviour. Variety seeking behaviour is more likely to occur for products that evoke lower rather than higher levels of involvement (Salt) Higher rather than lower purchase frequency (Toothpaste)
  13. 13. Shopping Behaviour  Where perceived differences among the alternatives are smaller rather than larger (Brown breads)
  14. 14. Shopping Behaviour Monitoring consumption rate for packaged goods Rationale: Economic & behaviour theory Households increase their usage when they have high inventory. Faster usage rates also occur if products are perishable, need refrigeration or occupy a prominent place in the kitchen Retailers can categorise these categories and thus promote them effectively
  15. 15. Shopping Behaviour Long term effect of promotions on shopping / shoppers' behaviour   In categories where promotions have become frequent, consumers might learn to anticipate future deals. This scenario suggests that a particular promotional event induces a household to stockpile on a given purchase occasion, followed by the promotion's long term negative effect, which is manifested as an increased probability that the household......
  16. 16. Shopping Behaviour ...... waits for another promotion before buying on subsequent purchase occasions.   Households develop price expectations based on their prior exposure to promotions over a long period such as moths / years These expectations, coupled with cost of inventorying product, affect consumer purchase timing and purchase quantity decisions.
  17. 17. Shopping Behaviour    Increasing expectations of future promotions lead to a reduced likelihood of purchase incidence on a given shopping trip and an increase in the quantity bought during a purchase. This strategy is consistent with the consumer learning to wait for good deals and stockpiling when these deals occur. Promotions thus lead to higher price sensitivities, reduced promotional efficacy, greater inventories and higher demand volatility
  18. 18. Shopping Behaviour Loyalty Programmes    Social identity research has shown that consumers feel a sense of group identification. Loyalty programmes generally use loyalty cards that members carry with them and have to show at each transaction with the company. This explicit token of membership will strengthen their sense of belonging to the company and enhance the identification effect.
  19. 19. Shopping Behaviour   Loyalty programmes give rewards to members, varying from saving for items and targeted offers, to special shopping nights, preference in retailer's partner institutions and preferred service treatment. The marketing activities within the loyalty programmes reward stimulates customer loyalty by providing either social or economic value.
  20. 20. Shopping Behaviour Benefits of Loyalty Programmes  Increased customer retention rates  Increased purchase per customer  Increased referrals  Reduced cost of acquisition  Reduced advertising cost for customer retention
  21. 21. Shopping Behaviour Aspects of Loyalty Programmes  Loyalty segments  Programme cycle  Instant gratification  Measurement Level of take up among customers Longevity of the programme Redemption rates Contribution to knowledge base Level of dialogue with customers Ability to segment customers  Cooperation